4 easy steps to calculate your company's YoY growth

[mouakter11]

If you're struggling to measure your company's growth over time, a good solution may be to calculate your year-over-year (YoY) growth. This is an analysis of key metrics that provides valuable insight into your company's status and progress. It allows you to better monitor its performance and refine financial decisions and strategies to achieve long-term goals.

In this article, we'll explain what YoY is and how to calculate it. We'll also explain why it's one of the essential growth metrics in business management.



What is YoY or year-over-year growth ?
YoY is an acronym that stands for "year over year." It is used to describe the year-over-year growth analysis of a specific metric . Data for that metric is compared with the previous year's data to determine its growth rate.

It's a valuable tool because it clearly measures how much your business has grown (or decreased) over the past year.

Let's look at an example of sales revenue growth. If your annual sales revenue was $1 million last year, and this year it's $2 million, your YoY revenue growth is 100%. This reflects that your sales and marketing strategies have been very successful over the past 12 months.

This calculation can also be used for any othe r spam database business metric.

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Steps to create your annual sales report

Why is it important to measure YoY growth?
Some of the reasons why YoY growth is a key sales indicator (KPI) are:

Eliminates misleading seasonal effects
Comparing a metric's performance year over year reveals the impact of seasonal variations. It's possible to determine whether there's sustained growth or monthly volatility.

For example, a retailer may notice that sales spike around Christmas. Without year-over-year calculations, quarterly analysis can misleadingly suggest that these sales spikes are sustainable.

Evaluating the annual context allows for accurate forecasting and better planning of strategies for the coming year.